Historical Sketch

Christopher Columbus first contact with the Americas in 1492 happened on the island of Guanahani (named San Salvador at the time) of the Bahamas archipelago. In the following, Spain laid a claim on the islands but did not establish settlements. Since the mid-17th century, England showed interest, and in 1648 the first settlers arrived, known as the "Eleutherian Adventurers". The colonial administration remained weak, and in the late 17th century, the Bahamas became a pirates' stronghold until their expulsion in 1717. In the following year, the Bahamas became a nominal crown colony. After World War II began a slow emancipation movement. In 1964, the Bahamas attained internal autonomy and a decade later, in 1973, followed independence as "Commonwealth of the Bahamas".

Monetary History Overview

The Caribbean had always been an important station on the trade routes between the Spanish American possessions and Europe. Thus, Spanish trade coins got introduced and dominated the payment transactions, predominantly the so-called "Spanish Dollar", the eight Reals in silver. The isolation of the islands brought scarcity of specie and thus caused an overvaluation of the trade coins compared with the European markets. In the English possessions, various "accounting Shillings" emerged which were determined by the local valuation of the Spanish trade coins, differing considerably from the metropolitan rating of 50 Pence Sterling per Spanish Dollar. In 1825, the Pound Sterling became the sole currency for all British possessions. The dominance of Spanish trade coins in payments did not change for the time being. In the mid-19th century, however, the local accounting currencies were abolished everywhere, which corresponded to a massive devaluation of the local money. In the Bahamas this was done in 1838, and as the Spanish Dollar had been traded at 96 Pence, it amounted to almost 48%. The foreign coinage was tolerated in payments until the late 19th century.

The proximity to the United States and the resulting economic ties had caused an inflow of US gold coins already before the abolition of the accounting currency in 1838. In the Bahamas, gold coins had been traditionally more prominent than in other places in the Caribbean where silver was dominating. In 1853, US gold was declared legal tender, and in 1864, also US halves and quarters were admitted as subsidiary coins. This remained so until 1911 when the US coins were demonetized. In 1889, the private Bank of Nassau began operations and issued paper money. The Bank defaulted in 1916, and government react by establishing a currency commission in 1919 that began issuing government notes. The bank of Nassau notes were not redeemed by the commission but were accepted by the commercial bank which taken over its assets. The Bahamian Pound was on par with the British pound Sterling and circulated alongside British paper money until 1936 when its legal tender status got limited. Due to the close economic relations with the United States, the Bahamas decided in the late 1960s to switch to the US Dollar area. In May 1965, the Bahamian Dollar at 7 Shillings became the new decimal currency. The switchover had resulted in an odd ratio against the US Dollar that was adjusted to parity in February 1970. No further change has occurred since then. The Currency Commission was succeeded by the Bahamas Monetary Authority in 1969 and by the Central Bank in 1974, one year after independence.

The Bahamas joined the International Monetary Fund (IMF) on 21.08.1973.

Currency Units Timeline

Currency Institutes Timeline

Monetary History Sources